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A Look at the New Unemployment Insurance Deal

BY

Congress voted today to continue federal emergency unemployment insurance (UI). The legislation gives unemployed workers a far better deal than UI legislation that the House passed last December. It also rejects extreme proposals in the House bill (see here and here) that would have changed the essential character of the UI system, which policymakers created in 1935 to provide financial assistance to workers who have lost their jobs through no fault of their own.

The agreement provides fewer weeks of UI benefits to the long-term unemployed than they received between late 2009 and the
end of 2011, but more weeks than they would have received under either of the alternatives: the maximum of 59 weeks available in the House proposal, or the maximum of 26 weeks or fewer in most states if federal benefits expired completely.

The first table below, from our new analysis, shows how the legislation will change the temporary federal emergency UI program (known as Emergency Unemployment Compensation or EUC), including the state unemployment rates needed to trigger different tiers of benefits. The second table shows how many weeks will be available in states over the course of the year, depending upon the state’s unemployment rate and whether it qualifies for benefits under the permanent, federal-state Extended Benefits (EB) program.